Oil prices fell on Thursday after a larger-than-expected rise in U.S. crude oil inventories, raising concerns about demand in the world’s largest economy and top oil-consuming nation.
Brent crude futures were down 34 cents, or 0.4%, at $81.26 a barrel at 03:37 GMT, while WTI crude futures were down 38 cents, or 0.5%, at $76.26 a barrel.
Both contracts lost more than $1 a barrel on Wednesday, weighed down by refining falling to their lowest levels since December 2022 and a rise in U.S. crude oil inventories.
According to Energy Information Administration (EIA) data, US crude stocks increased by 12 million barrels to 439.5 million barrels in the week to February 9, well above analysts’ expectations for an increase of 2.6 million.
Although the inventory increase raised concerns about demand among traders, some analysts said it was largely due to refinery utilization rates.
The BP refinery outage negatively affects US crude oil demand. The ongoing outage at BP’s Whiting refinery, along with some other refinery maintenance, has contributed to lower operating rates. Low refinery run rates mean gasoline stocks are dwindling.
On the supply side, Kazakhstan said it would compensate for January’s excess oil production in the next four months in line with its OPEC+ commitments. Iraq also said it would review oil production and address excess production above OPEC+ voluntary cuts within the next four months if found.
This development comes ahead of OPEC’s March meeting, where the group will decide whether to extend supply cuts into the second quarter. Any sign that an extension is unlikely will weigh on oil market sentiment.
Meanwhile, EIA data showed that gasoline and distillate stocks also fell more than forecast. Gasoline stocks decreased by 3.7 million barrels to 247.3 million barrels, despite the expectations of a decrease of 1.2 million barrels. Distillate stocks decreased by 1.9 million barrels to 125.7 million barrels, compared to expectations of a decrease of 1.6 million barrels.
Fuel demand has increased, helped by air travel returning to pre-COVID levels.
High-frequency demand indicators show oil demand increased by 1.6 million barrels in the first two weeks of February compared to January while pointing to a pickup in travel in China during the Lunar New Year.
